December 4, 2019 / 12:58 PM / 2 days ago

Deutsche Bahn planning stock market listing for Arriva next year

BERLIN (Reuters) - German state-owned railway operator Deutsche Bahn aims for an initial public offering (IPO) of its international transport unit Arriva next year, dpa news agency reported on Wednesday, citing CEO Richard Lutz.

The company is planning to offer a minority stake in Arriva starting in May, dpa said, with the remainder of the shares to be sold over three years.

“We definitely want to go public next year and then sell over a somewhat stretched-out period,” Lutz was quoted as saying.

A Deutsche Bahn spokeswoman confirmed the report but declined to give more details.

A source said in November Deutsche Bahn was in exclusive talks with U.S. buyout group Carlyle (CG.O) over the sale of Arriva but was also preparing for a potential flotation.

Talks with prospective buyers failed however, after bids did not meet Deutsche Bahn’s price expectations, sources have told Reuters.

Arriva, which employs more than 50,000 people across Europe, runs British rail franchises including Northern and the London Overground as well as buses around the country.

Earlier this year, the sale was expected to be valued at 3-4 billion euros ($3.3-$4.4 billion).

Lutz, who has been CEO since 2017, faces pressure to turn around the operational and financial performance of the deeply indebted company.

He also said Deutsche Bahn would offer a bond next year, aiming to raise up to 3 billion euros, dpa reported on Wednesday.

($1 = 0.9073 euros)

Reporting by Thomas Seythal; additional reporting by Arno Schuetze in Frankfurt; editing by Thomas Escritt and Elaine Hardcastle

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